Does the Fly Fitness franchise agreement bind the successors and assigns of the franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
This Agreement shall bind and inure to the benefit of the successors and assigns of Franchisor and shall be personally binding on and inure to the benefit of Franchisee (including the individuals executing this Agreement on behalf of the Franchisee entity) and its or their respective heirs, executors, administrators and successors or assigns; provided, however, the foregoing provision shall not be construed to allow a transfer of any interest of Franchisee or Principal(s) in this Agreement or the Franchised Business, except in accordance with Article 16 hereof.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement does bind the successors and assigns of the franchisor. The agreement ensures that the obligations and benefits extend to those who take over the franchisor's role.
This means that if Fly Fitness is acquired or merges with another entity, the new entity will be bound by the terms of the existing franchise agreements. This provides a level of security for the franchisee, as the core terms of their agreement should remain in effect even if the ownership or management of Fly Fitness changes. However, the agreement also stipulates that this does not allow the franchisee to transfer their interest in the agreement or franchised business, except as explicitly permitted within the transfer provisions outlined in Article 16 of the agreement.
This clause protects the franchisee's investment and business operations from being disrupted by changes in the franchisor's organization. However, franchisees should carefully review Article 16 to understand the limitations on their ability to transfer their own interests, ensuring they comply with Fly Fitness's requirements for any such transfer.